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Recently, the gold loan has become widely popular among people who need to meet unprecedented financial emergencies. Customers prefer gold financing facility because it features a range of benefits like minimal documents requirement, low processing fees, flexible repayment options, and so on.
Even then it is highly recommended that you make some enquiry with your financing institution before you take the loan against gold. We have compiled here five such questions. Check them out!
Q1. Does my gold remain safe when I give it away as an asset for getting the loan?
Yes, your gold remains safe when you take a loan against gold. The first reason behind this is, the gold that you deposit with the financing institution remains secured inside a vault which comes with high-tech security features and CCTV surveillance.
Secondly, accredited private and government financial institutions are given gold loans who are trustworthy and loyal to their businesses. So, you can always trust them with your gold asset.
Q.2. What type of gold can be offered as a gold asset to the financing institution for availing the gold loan?
There is no set rule on a specific variety of gold asset that will be considered appropriate for availing the gold loan. Therefore, you can produce gold coins, jewellery, gold bars, or anything made from pure gold.
Let us explain this in detail: Suppose you have a 22-carat necklace with precious or semi-precious stones studded in it. The financing institution will only consider the gold value in that gold asset and not feel the stones even if they are diamonds or rubies.
Similarly, if you have offered some gold assets of 22 grams that comprise 10 grams of silver with 12 grams of pure gold, the gold loan interest calculator will calculate your loan amount strictly based on the 12 grams of pure gold present in the gold asset.
Q3. How shall the loan amount be calculated against the gold asset that I deposit?
The process of availing gold finance against your gold asset would start when you take it to your money lending institution for checking its purity. After the purity is confirmed, the gold value for that particular day is checked and noted.
The gold loan interest calculator isthen used to make a precise calculation of the loan amount given to you against the gold asset.
Here, an important fact needs to be acknowledged: Every financing institution follows a standardised rule for calculating the loan amount. The Reserve Bank of India is the supreme authority which regulates this loan calculation.
It is a rule prescribed by RBI that the loan amount that will be given to a customer must ever exceed 75% of the value of the deposited gold asset.
However, there is one more thing here which you must take into account; you will not be given the entire loan amount that will be calculated and finalised against your gold asset. The financing institution will deduct their processing fee from that and hand over the remaining amount to you.
Q4. What are the documents that I need to furnish for getting a gold loan?
The documentation process for availing a gold loan is pretty simple. You do not need an elaborate list of documents at all.
The financing organisation will only ask you to submit your documents that are proofs of your address, age, residence and identity.
To put it precisely, you need your passport, Aadhaar card, PAN card or Form 60 as identity proof and your driving license, electricity or telephone bill as your age proof and address proof.
You will also have to submit two pieces of your passport size photograph.
Q.5. What are the eligibility criteria for getting the gold loan in India?
The fundamental eligibility criteria for getting a loan against a gold asset are an adult. You must be 18 years and above.
Secondly, you have an Indian citizen. Thirdly, you have to be mentally sound.
Whether you are a housewife, salaried professional, businessperson or a self-employed professional, you can apply for a loan against gold irrespective of your professional profile.